13 French stock picks that avoid France\’s economic trouble: JPM

Let’s be honest here. The French economy is not in a great shape and recent PMI data actually put the country well below other struggling nations, such as Italy, Ireland and Spain. The equity market in Paris, however, has proved to be quite resilient and is still looking at an 11% gain in the past 12 months.

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But analysts at J.P. Morgan Cazenove said in a note on Monday it could finally be time for expected French stock-market underperformance to kick in as “we are becoming increasingly concerned about the sharp deterioration in French activity relative to the rest of the region.” Read: 4 signs this rally is fatigued.

Companies with domestic exposure have outperformed exporters in the recent year, the analysts said, but this should be the time to see French firms with large international exposure claiming the biggest advances. In short, get out of the domestic basket and go long exporters.

J.P. Morgan Cazenove identifies 13 attractive French exporters deriving more than 70% of their revenues outside the country that trade relatively cheaply to historical valuations.

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